2024.12.24

Oil Prices Dip on Surplus Fears and Strong Dollar

Oil prices eased Monday, with Brent crude at $72.63 and WTI at $69.24, as concerns over a 2025 supply surplus and a stronger U.S. dollar weighed on markets. Analysts forecast lower average prices next year, while a restart of the Druzhba pipeline eased European supply fears. Mixed signals from the Fed and China's predicted oil consumption peak in 2027 added to the uncertainty.

------------------------------------------------------------------------------------------------

India's Crude Oil Imports Rise 2.6% in November Amid Strong Demand

India's crude oil imports increased by 2.6% year-on-year to 19.07 million metric tons in November, driven by a 9.3% rise in oil demand—the highest since May—due to robust economic and travel activity. However, imports declined 3.2% compared to October. Refined product imports grew 10.8% annually, while exports fell 5.5%.

LPG imports surged 14%, and gasoline exports jumped 42% to 1.24 million tons. Middle Eastern oil imports reached a 9-month high, while Russian oil intake dropped 13% from October, making up 32% of India's total intake, partly due to refinery maintenance and annual contracts with Middle Eastern producers.

------------------------------------------------------------------------------------------------

ExxonMobil Secures Two Greek-Owned VLCCs in Long-Term Charter Deal

ExxonMobil has finalized a three-year charter agreement with Greece’s Samos Steamship for two modern, scrubber-fitted VLCCs: the Olympus (301,900 dwt, built 2023) and the Parnassos (301,200 dwt, set for 2025 delivery). The deal, valued at $50,000 per day with an option to extend for two additional years, reflects the vessels' premium quality and advanced eco-friendly technology.

The rate surpasses the current market average of $47,500 for similar vessels, despite a recent slump in VLCC spot rates. This marks the longest charter deal in the tanker market since November and underscores the enduring appeal of high-specification tonnage for oil majors.

------------------------------------------------------------------------------------------------

First VLCC Sold for Recycling Since 2022 Amid Shadow Fleet Controversy

The Amor, a 2000-built VLCC with ties to Iranian crude trading, has become the first VLCC sold for recycling since August 2022. Sold for $440 per ldt, the deal earned its owner $17.9 million. The tanker, previously flagged by the US-based group UANI for alleged Iranian crude transshipments, faced scrutiny but was never officially sanctioned.

The sale highlights the complexities of recycling shadow fleet tankers, which operate in a legal grey zone. Brokers and cash buyers often avoid such deals due to reputational and legal risks, leading to discounted pricing. The Amor's sale may signal increased recycling activity for older VLCCs linked to Iran, as sanctions pressure limits their trading options.

------------------------------------------------------------------------------------------------

India's State Oil Refiners Struggle to Secure Russian Crude Amid Shifting Market Dynamics

India's state-owned refiners, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum, are facing difficulties in obtaining the Russian crude they need for January, with offers in the spot market dwindling. They were unable to secure six million barrels of Urals crude due to factors such as long-term contracts between Rosneft and private refiner Reliance Industries, and potentially reduced Russian crude exports.

Russia has been encouraging Indian firms to switch to long-term contracts, but state refiners have struggled with the terms, which are often less favorable. This shift, coupled with Reliance's recent independent deal with Rosneft, has reduced the availability of spot cargoes, leading to higher-priced alternatives from the Middle East and Africa. Despite these challenges, Indian state refiners have significantly increased Russian crude imports since the Ukraine war.

------------------------------------------------------------------------------------------------

Trump Threatens to Reclaim Panama Canal Control, Criticizes Panama's Fees

President-elect Donald Trump has sparked controversy by threatening to reassert U.S. control over the Panama Canal, accusing Panama of charging excessive fees and warning against potential Chinese influence. Trump declared the canal could be "returned to the U.S." if Panama fails to meet certain "moral and legal" principles.

Panama's President Jose Raul Mulino rebuffed the claims, defending the canal's independence and denying Chinese administrative involvement. The canal, critical for global trade and U.S. imports, was handed over to Panama in 1999 after decades of U.S. control. Trump's rhetoric underscores his unconventional approach to diplomacy and echoes past suggestions of territorial expansion, such as his interest in Greenland.

------------------------------------------------------------------------------------------------